Facebook Acquires Data Compression Company Onavo

Onavo software for stretching data plans will make Facebook more accessible in developing markets where feature phones prevail.

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Facebook has agreed to acquire Israeli startup Onavo for between $100 million and $200 million, according to various reports, although neither Facebook nor Onavo have disclosed the terms of the deal. This will be Facebook's first office in Israel.

Tel Aviv-based Onavo is a mobile analytics company founded in 2010 that makes data compression software and provides analytic services for smartphone applications. Its data compression app, called Onavo Extend, was introduced for iOS in 2011 and for Android in 2012. According to its website, the app can increase your mobile data plan by up to 500% without additional fees. Its analytics tool, called Onavo Count, tracks how much data is consumed by each app on your smartphone.

Facebook has focused heavily on strengthening its mobile business, which has experienced the most growth lately. The social network's acquisition of Onavo benefits this effort in three ways: First, Onavo's data compression software will be especially valuable to Facebook's 100 million customers using its Facebook For Every Phone app on feature phones. According to Facebook, millions of people in developing markets such as India, Indonesia and the Philippines rely on feature phone technology to connect to Facebook without having to purchase a pricey smartphone. These basic devices can cost as little as $20.

Second, acquiring Onavo supports Facebook's newest initiative, Internet.org, which aims to connect everyone across the world. Onavo executives named this as another perk of joining the Facebook team. Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung are also partners in the Internet.org initiative.

"We're excited to join their team, and hope to play a critical role in reaching one of Internet.org's most significant goals -- using data more efficiently so that more people around the world can connect and share," wrote CEO Guy Rosen and CTO Roi Tiger.

Finally, Facebook has an opportunity to break into a new market -- in Israel. According to reports, Facebook lost to Google in June in acquiring Israeli mapping company Waze after months of negotiations. Facebook reportedly wanted to move Waze's operations to Facebook's existing facilities, which Waze did not want. According to Onavo's Rosen and Tiger, its mobile utility apps will continue as a standalone brand -- like Facebook acquisitions Instagram and Parse -- and remain in Tel Aviv.

"We expect Onavo's data compression technology to play a central role in our mission to connect more people to the Internet, and their analytic tools will help us provide better, more efficient mobile products," a Facebook spokesperson said in a statement.

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